Op-ed: Utah legislative efforts might erase the gains from tax reform

Have you checked your paystub recently? Thanks to federal tax reform, chances are you’re now getting to keep more of your hard-earned money. But don’t get too comfortable with the boost in take-home pay. Some state legislators have hatched a plan to hike sales and other local taxes.

A bill introduced in the state Legislature at the beginning of the month would require counties within the Utah Transit Authority’s service area to impose a more than 1 percent sales tax — similar to a tax proposal voters rejected just a few years ago — and if counties fail to comply, the state will impose the tax anyway, effective July 1, 2022.

The measure would also raise the state transient room tax from .32 percent to a staggering 3 percent and double the rental car tax, bringing it to 5 percent. This will potentially harm our $8 billion tourism industry that generates more than 144,000 jobs and over $1 billion in annual tax revenue. Additionally, the bill allows funding currently allocated only for highways to be siphoned off for future UTA projects.

Supporters of the proposal say the state needs more taxpayer dollars to fund our transportation infrastructure. But between gas taxes and vehicle registration fees, the state brought in nearly $1 billion over the last two years.

Is every dime being spent responsibly? Before lawmakers reach into our pockets, maybe they better check first.

The UTA has a track record of poor stewardship of taxpayer dollars. A legislative audit in 2014 revealed that the agency made sweetheart deals with developers, including prepaying $10 million for a parking garage that was never built, and provided overly generous pay and bonuses to its executives while failing to properly plan for maintenance costs.

Even more troubling, the agency was not forthcoming during the audit and provided incomplete information, which left auditors “doubtful” and “uncertain what to believe” in some instances.

Since then, a few changes have been made, but pitfalls remain. The UTA, which is $2 billion in debt and recently approved plans to borrow an addition $88.5 million, still has not fully regained our trust. To address this situation, the new tax hike proposal also includes an extensive reorganization of the agency, getting rid of the 16-member volunteer board and replacing it with a full-time three-person commission, nominated by the counties and appointed by the governor.

The new structure could be just the thing to put the UTA on track toward fiscal responsibility. But the state should hold off on providing the agency any additional funds until we know for sure.

Moreover, lawmakers should never consider raising our taxes until they’ve gone line by line through the state budget, eliminated wasteful spending, prioritized the most important projects and made sure that every tax dollar is spent as efficiently and effectively as possible. Only then would it be reasonable to ask for more.

The average Utahn already pays more than $700 in sales taxes every year, according to the Utah Taxpayers Association. Higher sales taxes will be felt most by Utah families living from one paycheck to the next. Instead of doing the difficult work of governing and sticking to a budget, our state lawmakers would make it harder for these families to afford groceries, put gas in their cars or pay their bills.